UAE's e& and UK telecom giant Vodafone firm up agreement; e& Group CEO to join board
e& is Vodafone's biggest shareholder, and will cooperate on strategy, infrastructure
Dubai: In what is a major upgrade for the global telecom industry, UAE's e& and UK's Vodafone Group have entered a 'strategic relationship' that will bring them 'closer together in certain aspects of their businesses'. The scope of the deal covers Europe, Middle East and Africa.
e&, incidentally, has emerged as the biggest shareholder in Vodafone over the last few months, while Vodafone had said there was no move on e&'s part to acquire it.
e& and Vodafone's new 'relationship agreement establishes e& as a cornerstone shareholder of Vodafone. This is the next phase in a strategic relationship that began in May 2022, when e& made its first investment in Vodafone.
The strategic relationship also enables collaboration across multiple growth areas, as 'e& and Vodafone may be able to benefit from each other’s respective operational scale and complementary geographic footprint'.
The key areas of commercial collaboration that e& and Vodafone will initially pursue include:
- On enterprise, e& and Vodafone will explore jointly offering cross-border digital services and solutions to multi-national customers and public sector organisations. Services will include fixed and mobile connectivity, Mobile Private Networks, IoT, cybersecurity, and cloud-based services.
- In procurement, e& and Vodafone will seek to share best practices and may adopt joint procurement.
- In carrier, wholesale and roaming, the two operators will work together to become the partner of choice in providing access to high-quality digital infrastructure.
- In technology, both teams will seek to work together on a technology roadmap, including the evolution and adoption of OpenRAN.
Under the terms of the agreement, the Group Chief Executive Officer of e&, will join the Vodafone Board as a non-executive Director - for as long as e& maintains its current shareholding of 14.6 per cent. e& will also have the ability to nominate a second non-executive Director, independent of e&, if its shareholding exceeds 20 per cent (subject to certain adjustments while regulatory approvals are outstanding).
These appointments are subject to receipt by e& of the required regulatory approvals.
“Our investment in Vodafone is anchored by Vodafone Group's established position and worldwide reputation as a prominent industry player that provides cutting-edge connectivity and digital services," said Hatem Dowidar, Group CEO of e&. "This aligns with e&'s vision of becoming a global telecom and technology player.”
What e& will be obliged to do:
- Not acquire any interests in Vodafone’s shares which would result in it and its affiliates having an interest exceeding 24.99%;
- Not dispose of Vodafone shares for two years (save for a maximum of 3% of Vodafone’s shares during each 12-month period);
- Refrain from taking certain other public actions, including requisitioning a shareholder meeting or proposing any resolution to be put forward at a shareholder meeting.